Disclaimer: The opinions expressed in this article are the author’s own and do not necessarily reflect the views of crypto.news’ editorial team.
We are at the midpoint of what has been labeled a challenging year for major tech companies. From threats of TikTok bans to reports of Facebook data breaches, and revelations of Big Tech platforms sharing user data among themselves, the issues seem endless. However, the recent financial reports from these tech giants tell a different story.
Despite the controversies, the top five Big Tech companies have recorded profits exceeding $100 billion, driven by increased user engagement and brand advertising. Unfortunately, less than 0.5% of creators on these platforms are estimated to earn substantial revenue, collectively making less than $10 million. This stark contrast highlights the broken system of creator monetization under the current model.
The Revenue Generation Process of Big Tech Companies | Source: Visual Capitalist
Nevertheless, there is optimism on the horizon.
The creator economy is expected to double in size over the next four years, outpacing the growth rate of the gaming industry. While there is a promising future for creators, there remains an issue of unequal revenue distribution within the Big Tech/Content Creator ecosystem. The current setup mirrors the real-world scenario where the top 1% benefits from the work of the remaining 99%.
Apart from the top-tier influencers, most creators find themselves at the bottom of the pyramid. This disparity needs to be addressed, considering the significant effort creators put into their work daily. From creating fresh content to analyzing user data, adapting to algorithm changes, and seeking validation, the life of a creator is far from easy. The added risk of getting shadowbanned or losing intellectual property due to unclear policies further complicates matters.
Can web3 revolutionize social media?
The concept of building supportive communities to fund creativity is not new and has evolved from Shakespearean times to modern crowdfunding campaigns and community-based platforms. What can web3 offer in this realm?
While social media platforms dominate the digital landscape, managing user-generated content and multimedia comes with high costs. Companies have to invest in cybersecurity, compliance, R&D, product development, cloud storage, and talent recruitment. Despite their reasons for retaining a large share of earnings, creators should not miss out on potential income.
Decentralization could be the answer to boosting user engagement through fairer revenue distribution. Creators are shifting focus from brand partnerships to nurturing their own communities, where creativity and connection are valued and rewarded.
This shift is where web3 SocialFi systems play a crucial role. By enabling ownership through tokenized access and linking a creator’s digital equity to token value, a mutually beneficial ecosystem is created. Every interaction in this system enhances the creator-user relationship and adds value to the digital community.
SocialFi platforms are leading the way in transitioning from Big Tech dominance to a creator-owned model, democratizing digital content monetization. While their tokens have had mixed success, the initial enthusiasm from new users indicates untapped potential in this space.
The impact of the crypto summer on web3 creators
With cryptocurrencies gaining global attention, there has been a surge in web3-focused creators in recent months. Despite web3 being a foreign concept to many, digital creators are using platforms like X, Telegram, Instagram, and YouTube to educate users about the benefits of web3 and cryptocurrency.
Decentralized projects with innovative web3-focused communities and tokenized ecosystems offer exciting opportunities for creators to engage with their audience and monetize their content effectively.
Many users today seek more meaningful interactions with creators and want to be actively involved in the creative process. Tokenized platforms facilitate this two-way engagement, providing value to both fans and creators and fostering a sense of community.
Creating transparency in monetization
Building a democratized earning system that incentivizes all parties requires transparency and quality engagement. Platforms must prioritize creators’ needs while maintaining user engagement and authenticity free from bots. Continual upgrades and web3-focused features are essential for the sustainability and growth of SocialFi platforms.
The success of this sector hinges on the management, vision, and well-designed tokenomics of the founding team. Poorly designed tokenomics and unsustainable practices have led to the downfall of promising SocialFi platforms in the past. Nonetheless, the interest among early users signals a demand for creator-focused platforms where both creators and users benefit.
In the web3 era, social earnings will take on new meanings for users. The success of platforms in this era will be determined by how well they incentivize creators and users to participate in a more engaging and financially rewarding social ecosystem.
Read more:
A loyal community has brought web3 together, but now it is killing it | Opinion
Dave Catudal
Dave Catudal
is an international tech and wellness entrepreneur and co-founder of Lyvely, a SocialFi platform that rewards creators and users with $LVLY tokens for their contributions and engagement within the platform.